Most renters in U.S. now over age 40

Thursday

WASHINGTON - The majority of U.S. renters are now older than 40, a fundamental shift over the past decade that reflects the lasting damage of the housing crash and an aging population.

WASHINGTON — The majority of U.S. renters are now older than 40, a fundamental shift over the past decade that reflects the lasting damage of the housing crash and an aging population.

This finding in a report released on Wednesday by Harvard University’s Joint Center for Housing Studies overturns the assumption that the rental boom is only the result of twenty-somethings flocking to hip urban centers. Single-family houses are a growing share of rentals. And affordability problems are mounting as rents rise faster than wages, while apartment construction increasingly targets tenants with six-figure incomes.

Nearly 51 percent of renters have celebrated their 40th birthday, according to the report’s analysis of Census Bureau data. That amounts to 22.4 million households.

A decade ago, when the housing bubble peaked in 2005, 47 percent of renters — or 16.4 million households — were older than 40. Their share was 43 percent in 1995.

The increase in older renters corresponds with a surge in foreclosures after the housing bubble popped. Since the 2008 recession triggered by the housing bust, there have been roughly 6 million completed foreclosures, according to CoreLogic, a property-data firm.

About 43 million U.S. households now rent, up from about 34 million a decade earlier, before the housing crash.

But Herbert also noted that more of the baby boomers born after World War II are growing older, which also has caused a sharp increase in the number of renters between the ages of 55 and 69 in the past 10 years.

During that same period, the United States has added a total of 9 million renters — including younger millennials recently out of college.

But demand has outpaced supply and caused prices to rise.

Rents increased 7 percent between 2001 and 2014 after adjusting for inflation, while incomes fell 9 percent, the report said.

The result is that a larger number of Americans must devote more than 30 percent of their income to rent, a level that the government considers to be financially burdensome.

Over the past decade, that number has jumped from 14.8 million to 21.3 million, or 49 percent of all renters.

In Ohio, 739,000 households, or 46 percent of all renting households, pay more than 30 percent of their income to rent. In the Columbus area, 137,000 households — 45.3 percent of all rentals — are financially burdened.

The share of renters being financially burdened has dropped from its 2011 peak, but the total number continues to climb.

Construction has done little to ease the problem. Permitting for multifamily construction has increased a robust 17 percent this year.

But the median rent on a newly built apartment was $1,372 a month in 2014, about $500 more a month than what about half of renters could afford without being financially burdened.

Much of the apartment construction has catered to wealthier households looking to live near restaurants, parks, gyms and offices. The number of rental households earning in excess of $100,000 has risen by 1.6 million in the previous decade.

In central Ohio, new luxury apartments such as the Julian and 250 High cater to high-income empty-nester tenants willing to pay up to $3,000 a month for large rooms, indoor parking, walk-in closets, spalike baths, high ceilings and gourmet kitchens.

But in the wealthiest markets, even people with decent incomes between $30,000 and $44,999 can’t keep up with the rent. More than 70 percent of renters at this income level are classified as financially burdened in Washington, San Francisco, Los Angeles, New York and Miami.

“We’ve gotten ourselves into a deep hole — and it’s not going to be easy to get out of it,” Herbert said. “We expect the affordability problem will persist.”

Dispatch Reporter Jim Weiker contributed to this story.

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